REG - Yooma Wellness Inc. - Results for Q4 and Fiscal 2021

Yooma WellnessAnnouncement

17/05/2022 15:00

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RNS Number : 8239L  Yooma Wellness Inc.  17 May 2022

17 May 2022

 

Yooma Wellness Inc.

("Yooma" or the "Company" or the "Group")

 

 

Yooma Wellness Reports Results for Q4 and Fiscal 2021

Exceeding Forecasts with Revenue of US$5.3M in Q4 2021

Yooma Wellness Inc (CSE: YOOM, AQSE:YOOM), a Toronto-based
vertically-integrated global wellness platform that develops and markets a
portfolio of wellness brands, today released its annual financial statements
(the "Financial Statements") for the financial year ended December 31, 2021
(the "Reporting Period").  A summary of Yooma's operational and financial
highlights during the Reporting Period are set out below and more detailed
information is contained in the Financial Statements and related Management
Discussion and Analysis, which are available on Yooma's SEDAR page at
www.sedar.com (http://www.sedar.com) .

 

Lorne Abony, Chairman at Yooma commented "We are delighted with the Q4
results, which position Yooma as one of the largest publicly-listed CBD
wellness companies outside of North America. Since raising capital in Q3 2021,
the Company has executed on the business plan it presented to investors - to
acquire brands and businesses and enter new markets to establish a global
wellness platform. The markets have been difficult; and we do not believe our
current share price is a fair reflection of what the Company has achieved or
its potential for further growth. Depressed share prices make additional
capital raising and further acquisitions difficult in the short-term, as they
would be unfairly dilutive to our shareholders. They also make it difficult to
move to other regulated stock exchanges and raise the much-needed growth
capital to support our brands."

 

Mr. Abony continued, "For these reasons the Company has appointed Canaccord
Genuity Corp. as its strategic adviser to assist the Company in undertaking a
strategic review of potential options for the Company, which may include a
listing on another regulated stock exchange, sale of assets, or further
M&A by the Company if financing can be secured on acceptable terms. The
Company will make a further announcement in due course regarding the results
of its strategic review. Lastly, I would like to take the opportunity to thank
the management teams of the companies we acquired in 2021 - we know the share
price is disappointing to them, as it is to all of us, and we have assured
them we are working hard to realise value for them and for all our
shareholders."

 

Jordan Greenberg, CEO at Yooma, added: "Our fourth quarter saw revenue of
US$5.3 million, exceeding previous forecasts, as well as the successful
completion of two strategic acquisitions, including the very exciting addition
of Vertex Co., Ltd. in Japan, which has significantly expanded our global
footprint and access to Asian markets, as well as the range and scope of our
wellness offerings. We are now increasingly focused on integrating our
existing assets to achieve operational synergies and revenue growth, while
also looking for opportunities to increase efficiency and reduce costs as we
enter a period of rationalization to streamline our global platform."

Yooma Highlights (FY 2021)

Yooma's focus in 2021 was on setting the stage for future growth in its quest
to become a vertically-integrated global leader in the marketing, distribution
and sale of wellness products, and implementing the first phases of its
"buy-and-build" strategy.  Significant financial and operational highlights
during the Reporting Period included:

 Capital Markets Transactions

·    Completed a reverse takeover transaction on February 10, 2021,
securing approximately US$4.0 million of additional cash to fuel the Company's
strategic plan and giving the Company access to future sources of public
capital. The Company's common shares began trading on the Canadian Securities
Exchange on February 11, 2021.

·    Completed the dual-listing of the Company's common shares on the
Aquis Stock Exchange Growth Market ("AQSE"), a UK-based multilateral trading
facility for entrepreneurial companies seeking visibility and access to growth
capital in Europe.  This dual-listing was completed and the Company's common
shares began trading on the AQSE on August 10, 2021.

·    Concurrent with the dual-listing of the Company's common shares on
the AQSE, an equity financing was completed on August 10, 2021, raising
proceeds of US$10.3 million, to be used for general corporate purposes and to
complete several strategic acquisitions.

Completed Acquisitions

·    Successfully completed a total of six significant acquisitions in the
wellness space valued, in aggregate, at approximately US$57.3 million.  These
acquisitions have dramatically expanded the Company's global footprint and the
range and scope of its wellness offerings. Significant acquisitions included:

o  The acquisition on March 11, 2021 of the wellness brands of EMMAC Life
Sciences Group, including Blossom (CBD skincare brand), MYO (UK nutraceutical
brand focused on sports nutrition), and Hello Joya and What the Hemp (France
based hemp-protein snack brands) in a transaction valued at US$8.1 million.

o  The acquisition on March 19, 2021 of Socati Corp., a leading processor of
THC-free broad-spectrum hemp extracts and ingredients for use in CBD products
in a transaction valued at US$25 million.

o  The acquisition on August 19, 2021 of UK market-leader Vitality CBD Ltd.,
a distributer of CBD products, including oils and sprays in a wide range of
flavours and strengths, edibles, and a specially developed and formulated
range of CBD skin care cosmetic products, in a transaction valued at US$10.2
million.

o  The acquisition on September 30, 2021 of US-based Big Swig, Inc., a
specialty drinks business in a transaction valued at US$1.175 million.

o  The acquisition on October 2, 2021 of Vertex Co., Ltd., a wellness
products company in Japan, with sales through major home shopping networks
(QVC, Nihon-TV and Fuji-TV), as well as various ecommerce channels (Rakuten,
Yahoo Shopping and the company's Shop-V platform) in a transaction valued at
US$12 million.

o  The acquisition through a subsidiary on October 13, 2021 of N8 Essentials,
LLC, a US-based manufacturer of CBD products in a transaction valued at
US$0.79 million.

Operational Highlights

·    Blossom CBD skincare brand was relaunched, including nine new SKUs
with a focus on expert holistic skincare. The brand achieved key listings into
world-renowned Selfridges and John Bell & Croyden, which holds the Royal
Warrant as Pharmacists to Her Majesty the Queen.

·    Vitality CBD products continue to achieve premium rankings on Amazon
UK for CBD search results and significant revenue growth.

·    Vertex completed its largest ever single product campaign during Q4
with QVC.

·    Greenleaf launched its hemp protein brand What the Hemp! in France's
leading grocery retailer Casino, with 12 SKUs available in-store at a total of
414 Casino locations.

·    Vitality CBD completed a 300-store launch in ASDA, one of Britain's
leading retailers, including 17 of Vitality's well-being and active CBD
products in ASDA's vitamin aisles and in-store pharmacies, making Vitality CBD
the most extensive CBD product range in ASDA.

·    Yooma completed the rebuild and integration of its UK e-commerce
sites including hosting, management and fulfilment of all UK brands under one
e-commerce business division, allowing the Company to quickly scale existing
and future UK and European brands.

·    The Company wound-down its operations in China following the
announcement that China's National Medical Products Administration had added
CBD to its "List of Prohibited Use Cosmetic Ingredients" and shifted its focus
onto other markets where it has been experiencing more significant growth.

Post-Reporting Period Highlights

·    MYO Plant Nutrition products were launched in Boots, one of the UK's
leading health and beauty retailers, accelerating momentum from 2021 with
products now available in Holland & Barrett, Selfridges, Lloyds Pharmacy
and Amazon, amongst others.

·    Vitality CBD, Blossom Skincare and MYO Plant Nutrition brands were
all added to eBay's CBD pilot program, marking a significant step forward for
the global wellness market.

·    Greenleaf launched its hemp protein brand What the Hemp! in more than
50 locations of France national grocery retailer Carrefour, with ten SKU's now
available.

·    Vitality CBD and its extensive product range were successfully
published on the UK Food Standard Agency's Novel Foods approved list for CBD
products.

·    Greenleaf launched its What the Hemp! CBD oils and hemp infusions in
all 90 locations of specialty retailer Nature et Découvertes.

·    Vertex's "Branfine" facial massager, which originally launched on QVC
Japan in 2018, continues to be a hit product with 240,000 units sold to date,
including a successful campaign in March called "Today's Special Value".

·    Vitality CBD has maintained its number one ranking on Amazon in the
CBD category and has dominated eBay since launch, achieving a 20% market share
of all CBD sales on the marketplace.

·    As part of its ongoing rationalization efforts, the Company has
significantly reduced its operational footprint in the United States, where a
lack of regulatory clarity around CBD products is perceived by the Company to
be limiting growth. Operations at Socati, N8 and Big Swig have been suspended
and certain assets have been or are in the process of being liquidated as the
Company redeploys resources to jurisdictions where a more structured
regulatory environment is expected to facilitate growth in the CBD industry,
as well as in the Company's non-CBD businesses.

Selected Financial Highlights (FY2021)

During the Reporting Period, the Company generated revenues of US$10.18
million, but experienced comprehensive losses for the year of US$33.35
million, reflecting cost of sales of US$7.81 million and expenses of US$35.71
million, relating primarily to the acquisition and integration of six new
businesses into Yooma's global platform, expenses incurred in connection with
capital raising activities, its reverse takeover transaction and AQSE
dual-listing, impairment of assets such as goodwill and intangible assets,
professional fees and business and administrative expenses incurred by the
Company's operating divisions.

 All dollar amounts in USD.                                                  For the year ended December 31, 2021                                                          For the year ended December 31, 2020

 Revenue                                                               $                           10,184,545                                                              42,765
 Cost of sales                                                                                    (7,811,554)                                                              (86,276)
 Gross profit (loss)                                                   $                            2,372,991                                                              (43,511)

 Expenses
 Depreciation and amortization                                           $   912,461                                                                                       17,358
 Consulting fees                                                             755,001                                                                                       747,579
 Professional fees                                                           2,383,699                                                                                     572,186
 Listing expense                                                             960,725                                                                                                           -
 Loss on disposition of capital assets                                                        715,142                                                                                           -
 Assets write-off                                                                             2,830,804                                                                                         -
 Impairment of goodwill and intangible assets                                               19,672,801                                                                                          -
 Stock-Based compensation                                                    427,709                                                                                                           -
 Fair value adjustment on liability warrants                                 (1,909,978)                                                                                   -
 Other income                                                          $     (149,220)                                                                                     (11,489)
 General and administrative                                                  9,105,890                                                                                     857,688
 Fair value adjustment on investments                                                                 -                                                                    46,999
                                                                        $    35,705,034                                                                                    2,230,321

 Current income tax expense                                                  (167,612)                                                                                     -
 Deferred income tax recovery                                                382,510                                                                                       -
 Net loss for the year                                                 $     (33,117,145)                                                                                  (2,273,832)

 Foreign currency translation                                          $     (235,545)                                                                                     -
 Comprehensive loss                                                    $     (33,352,690)                                                                                  (2,273,832)

 Basic and diluted loss per share attributable to common shareholders   $
                                                                             (0.43)                                                                                        (0.08)

( )

About Yooma Wellness Inc.

Yooma's mission is to build a vertically-integrated global leader in the
manufacturing, marketing, distribution, and sale of wellness products
including hemp seed oil and hemp-derived and cannabinoid (CBD) ingredients.
The company leverages strategically curated sales channels and ecommerce
networks to deliver a diverse mix of wellness products through operating
subsidiaries in the United States, United Kingdom, France and Japan.
Learn more at www.yooma.ca (http://www.yooma.ca/)

 

The Directors of the Company accept responsibility for the contents of this
announcement.

 For further information, please contact:
 Yooma Wellness Inc.                                        Via Buchanan

 Jordan Greenberg, CEO                                      Tel:+44 (0) 20 7466 5000

 jgreenberg@yooma.ca (mailto:jgreenberg@yooma.ca)

 AQSE Corporate Adviser:                                    Tel: +44 (0) 20 7469 0930

 Peterhouse Capital Limited                                 Tel: +44 (0) 7990 139 093

 Guy Miller / Mark Anwyl

 Media Enquiries (UK / Europe):                             Tel: +44 (0) 20 7466 5000

 Buchanan                                                   www.buchanan.uk.com (http://www.buchanan.uk.com)

 Henry Harrison-Topham / Jamie Hooper

 Ariadna Peretz / George Beale

 yooma@buchanan.uk.com (mailto:yooma@buchanan.uk.com)

 

Notice regarding Forward Looking Statements

All information included in this press release, including any information as
to future financial or operating performance and other statements of Yooma
that express management's expectations or estimates of future performance or
activities, other than statements of historical fact, constitute
forward-looking information or forward-looking statements (collectively,
"forward-looking statements") within the meaning of applicable securities laws
and are based on expectations, estimates and projections as of the date
hereof. Forward-looking statements are included for the purpose of providing
information about management's current expectations and plans relating to the
future. Wherever possible, words such as "will", "intend", "believe",
"future", "go forward", "to become", "pursuit", "pursuing", "potential",
"plan", "to enter", "continues to" or the negative of these words or other
variations thereof, have been used to identify such forward-looking
information. Specific forward-looking statements include, without limitation,
all disclosure regarding future results of operations, economic conditions and
anticipated courses of action, including statements about Yooma's mission and
strategic plan; revenue forecasts under the "Yooma Outlook" section,
commercial partnerships and product launches; and the nature and focus of
Yooma's business going forward.

There are many risks and uncertainties that may affect forward-looking
statements including, among others, regulatory risk in each jurisdiction in
which Yooma does or intends to operate; the uncertainties, effects of and
responses to the COVID-19 pandemic; reliance on licenses; competition;
dependence on senior management and key personnel; general business risk and
liability; regulation of the CBD industry; changes in laws, regulations and
guidelines; compliance with laws; limited operating history; unfavourable
publicity or consumer perception; product liability, risks related to
intellectual property; product recalls; difficulties with forecasts;
management of growth; litigation; Yooma's ability to effectively integrate
existing and future acquisition targets into its platform; the effects of
competition in the industry; the requirement for increasingly innovative
product solutions and service offerings; trends in customer growth;
sufficiency of current working capital to support future operating and working
capital requirements; and other matters which are beyond the control of Yooma.
Although the forward-looking statements contained herein reflect management's
current beliefs and reasonable assumptions based upon information available to
management as of the date hereof, Yooma cannot be certain that actual results
will be consistent with such forward-looking information. Yooma cautions you
not to place undue reliance upon any such forward-looking statements. Yooma
disclaims any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or otherwise,
except as required by applicable law. Nothing herein should be construed as
either an offer to sell or a solicitation to buy or sell securities of Yooma.

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